(Answered) Question - on december 1 2015 the good-buy company american

Accounting

Question - On December 1, 2015 the Good-Buy Company (American) sold inventory to the Adios Company (Mexican), with payment of 12,000 pesos to be received March 1, 2016. The Good-Buy Company enters into a forward contract on December 1, 2015 to sell the 12,000 pesos. Information on the exchange rates of the dollar with the peso are as follows: Date Spot rate forward rateDec. 1 2015 $2.30 $2.375Dec. 31, 2015 $2.40 $2.50Mar. 1, 2016 $2.55 $2.89 Good-Buy's borrowing rate is 12% (1% per month) Good-Buy has determined that this is a cash flow hedge and recognizes any premium or discounts under the straight line method.

Required: Prepare all journal entries good-buy makes on Dec. 1, 2015 Dec. 31, 2015 and March 1, 2016.

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